|
IGCSE Economics Resources
Note:
1.2 Factors of production Topic Questions/ IGCSE Economics / Paper 1/ 0455 /0987
Test your Self
Topic: Factors of Production
Try the questions first. Click to reveal the correct answer and explanation.
Try the questions first. Click to reveal the correct answer and explanation.
Q1. Which statement about the factors of production is correct?
Reveal Answer
Correct Answer: A – A river from which a company draws water is called land
In economics, land means all natural resources used in production, not just soil or farmland. A river is a natural resource, so it is classified as land. Option B is wrong because raising finance is not itself capital. Option C is wrong because supervisors are workers, so they are labour. Option D is wrong because the owner who organises production is enterprise, not labour.
In economics, land means all natural resources used in production, not just soil or farmland. A river is a natural resource, so it is classified as land. Option B is wrong because raising finance is not itself capital. Option C is wrong because supervisors are workers, so they are labour. Option D is wrong because the owner who organises production is enterprise, not labour.
Q2. The following are four ways factors of production are used. What is likely to require the greatest use of the factor enterprise?
Reveal Answer
Correct Answer: B – a corn farmer negotiating with other farmers to hire expensive machinery
Enterprise involves organising production, taking decisions and taking risks. Negotiating with other farmers to hire expensive machinery shows strong business decision-making and coordination, which is a clear example of enterprise. The other options involve much less organising and risk-taking.
Enterprise involves organising production, taking decisions and taking risks. Negotiating with other farmers to hire expensive machinery shows strong business decision-making and coordination, which is a clear example of enterprise. The other options involve much less organising and risk-taking.
Q3. Each of the factors of production earns an income. What are the incomes for capital and enterprise?
Reveal Answer
Correct Answer: A – interest, profit
Each factor of production receives a different reward. Capital earns interest, while enterprise earns profit. Labour earns wages and land earns rent, so the other options do not match the correct factor rewards.
Each factor of production receives a different reward. Capital earns interest, while enterprise earns profit. Labour earns wages and land earns rent, so the other options do not match the correct factor rewards.
Q4. Which is not a factor of production?
Reveal Answer
Correct Answer: C – a farmer's bank account
The factors of production are land, labour, capital and enterprise. A farm can be land, a farmer is labour, and a tractor is capital because it is a man-made aid to production. A bank account itself is not a factor of production; it is simply a place where money is stored.
The factors of production are land, labour, capital and enterprise. A farm can be land, a farmer is labour, and a tractor is capital because it is a man-made aid to production. A bank account itself is not a factor of production; it is simply a place where money is stored.
Q5. Which statement about factors of production is correct?
Reveal Answer
Correct Answer: A – The fruit picked from the tree is called land
In economics, land includes all natural resources and everything that comes from nature. Fruit grown on a tree comes from nature, so it is classified as land. Managers are usually labour unless they are taking business risks and organising the business as entrepreneurs. Money itself is not the same as real capital goods used in production, and the owner of a company is enterprise, not labour.
In economics, land includes all natural resources and everything that comes from nature. Fruit grown on a tree comes from nature, so it is classified as land. Managers are usually labour unless they are taking business risks and organising the business as entrepreneurs. Money itself is not the same as real capital goods used in production, and the owner of a company is enterprise, not labour.
Q6. The introduction of robots has meant that many firms now require fewer workers to produce their goods and services. According to this statement, which factor of production is replacing workers?
Reveal Answer
Correct Answer: A – capital
Robots are man-made aids to production, so they are classified as capital. If firms use robots instead of workers, capital is replacing labour in the production process.
Robots are man-made aids to production, so they are classified as capital. If firms use robots instead of workers, capital is replacing labour in the production process.
Q7. What would an economist regard as an example of the factor of production capital?
Reveal Answer
Correct Answer: C – the building by a firm of a new factory
In economics, capital means man-made goods used to produce other goods and services. A new factory is a physical asset used in production, so it is capital. Shares, borrowing and savings are financial items, but they are not the factor of production capital in this context.
In economics, capital means man-made goods used to produce other goods and services. A new factory is a physical asset used in production, so it is capital. Shares, borrowing and savings are financial items, but they are not the factor of production capital in this context.
Q8. A government wishes to increase agricultural output. It gives farmers the tools to irrigate the farmers’ fields. Which factors of production are provided by the farmers?
Reveal Answer
Correct Answer: C – labour and land
The government provides the tools, which are capital. The farmers provide their work, which is labour, and their fields, which are land. Therefore the factors provided by the farmers are labour and land.
The government provides the tools, which are capital. The farmers provide their work, which is labour, and their fields, which are land. Therefore the factors provided by the farmers are labour and land.
Q9. In 2016, 20 billion barrels of oil and 1.6 billion barrels of natural gas were discovered in Texas, US. Which factor of production has increased in the US due to this discovery?
Reveal Answer
Correct Answer: D – land
Oil and natural gas are natural resources. In economics, natural resources are classified as land. Because more natural resources were discovered, the amount of land available to the economy has effectively increased.
Oil and natural gas are natural resources. In economics, natural resources are classified as land. Because more natural resources were discovered, the amount of land available to the economy has effectively increased.
Q10. Which statement about the factors of production is correct?
Reveal Answer
Correct Answer: D – Land is a natural resource and includes trees and fish
Land includes all natural resources, such as forests, trees, fish, rivers and minerals. Option A is wrong because capital refers to man-made goods used in production, not bank savings. Option B is wrong because office workers are labour, not enterprise. Option C is wrong because labour includes people of working age who are able and willing to work, not all pensioners and children.
Land includes all natural resources, such as forests, trees, fish, rivers and minerals. Option A is wrong because capital refers to man-made goods used in production, not bank savings. Option B is wrong because office workers are labour, not enterprise. Option C is wrong because labour includes people of working age who are able and willing to work, not all pensioners and children.
Q11. Which factor has the correct factor reward identified?
Reveal Answer
Correct Answer: D – land – rent
Each factor of production has its own reward. Land earns rent, labour earns wages, capital earns interest, and enterprise earns profit. That is why option D is the correct match.
Each factor of production has its own reward. Land earns rent, labour earns wages, capital earns interest, and enterprise earns profit. That is why option D is the correct match.
Members Area
Unlock the complete range of solved past exam papers along with mock exams, notes, timed quizzes, interactive flipbooks and more.
Unlock Complete Resources
Course content
Notice
You have completed % Of the course
You can download the course completion certificate after completing the course
Well done
Congratulations!!!
You are now eligible to download the course completion certificate.